Torts Outline Introduction Goals of torts law: Corrective Justice

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  P tried to bring suit against Honda for not having air bags, but federal transportation standard provided that not all vehicles that year need have passive restraints
  
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  The act did not expressly preempt the suit bc it had a saving clause which allows some common law cases to be brought
  
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  However, this suit still found to conflict with the act bc intent of the act was to allow for a range of different restraint devices (obstacle preemption)
  
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  Private rights of action should not be permitted if they undermine federal policy
  

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  Colacicco v. Apotex – conflict preemption
  
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    Husband brought suit against drug company alleging that inadequate labeling lead to suicide of wife
    
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    Tort claims found to be impliedly preempted bc the FDA controls the contents of the drug labels and decided that the connection between the drugs and suicide was not substantial enough to put on a label
    
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    Claims against generic drug manufacturer also preempted bc under FDA regulations, required to have the same warnings as the brand name
    

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  Objective of compensation is to give the P the equivalent in money for the actual loss caused by another
  
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  Under corrective justice theory, damages should place the P in the same position she would have been in had the harm never been done
  
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    In extreme cases, no amount of money can serve that function
    
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  Under deterrence function, damages are the price the D pays for engaging in a certain activity
  
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    The level of damages could result in the over or underdeterrence of an activity
    

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  Damages for monetary losses, biggest categories are medical expenses and lost wages
  
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  Calculation of these damages is not necessarily easy, factors to take into account:
  
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    Future damages that are uncertain
    
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      Structured settlements can reduce the uncertainty of future lost earnings and medical expenses
      
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    Life expectancy
    
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    Inflation, interest & discount rates
    
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      The value of the same amount of money is worth more now than later
      
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    Mitigation of damages
    
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    Previous v. future wages
    
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      Should try to predict what future wages would be – especially troublesome to determine for children
      
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      How should people be subclassified? I.e. using female tables for females would result in systematic undercompensation
      
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        Chamallas article – using blended tables could further deterrence bc Ds would have to compensate equally regardless of gender or race
        
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        Under a corrective justice theory, it would be better to use more subcategories to get a more accurate result
        

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  Encompass injuries that are difficult to quantify, including pain and suffering (worry, anguish, grief) and loss of enjoyment of life
  
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  McDougald v. Garber – loss of enjoyment of life requires awareness
  
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    P denied nonpecuniary damages for loss of enjoyment of life bc she was in a coma
    
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      Reasoning is that damages are for compensation, not punishment of D
      
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      Paradoxical result that P with more brain damage would have less recovery, but this is consistent with compensatory function of damages
      
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    Pain & suffering and loss of enjoyment of life placed into one category bc they overlap and are based on the legal fiction that money can compensate for these losses
    

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  Per diem rule – could reduce the difficulty in valuating nonpecuniary damages by breaking down the damages per day
  

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  Pros of contingency fee system:
  
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    Allows P to bring claims that they would not be able to bring without it
    
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  Cons of contingency fee system:
  
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    Sometimes allows lawyers to take huge chunks of P’s recovery
    
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      Especially unfair when settling easy cases
      
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    Gives incentive for lawyers to seek out cases with promise of large damages
    
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  A fixed fee creates the incentive for a lawyer to put in minimal effort, whereas an hourly fee creates the incentive for a lawyer to lag
  

Fee Shifting

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  The largest item in any litigation is attorney’s fees, followed by expert witness fees
  
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  Attorney’s fees are rarely awarded unless can prove that other side brought suit maliciously or frivolously
  
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  The P will only litigate if the expected return is greater than the expected cost
  

Collateral Benefits

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  P’s insurance should not be reduce damages bc this only creates equity between the insurer and the P, while the D still needs to compensate P for wrong
  
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  Subrogation and reimbursement prevent double recovery by the P by allowing parties giving collateral benefits to recover their expenses from the damages awarded
  
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    An insurance company cannot recover through subrogation from the wrongdoer if the injured does not recover
    

Wrongful Death and Loss of Consortium

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  Vindicate the relational interest of the P to the person injured or killed
  
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  Irony that it is cheaper for a D to kill his victim than injure him for life
  
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  Loss of consortium universally extended to a wife or husband, and many states extend it to children
  

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  The D reasonably engaging in cost-benefit calculations to valuate human life usually results in larger punitive damages than if there was no analysis at all
  
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  The assessment of moral outrage goes against the cost/benefit analysis of the hand formula bc Ds are punished for making these assessments that the tort system encourages it to do
  
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  Should the D’s wealth be taken into account?
  
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    For deterrence to be effective, the penalty should make an impact
    
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    Wealth may also be taken into account to make sure a D isn’t penalized into bankruptcy
    
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    A D’s wealth would allow it to put on a stronger defense
    
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  Appellate court has de novo review for punitive damages but only abuse of discretion for compensatory
  

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  State Farm Mutual Automobile Insurance Co. v. Campbell – appellate review of punitive damages
  
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    P awarded $145 million punitive damage award for bad faith dealing with insuree
    
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    Huge award due to low probability of detection and nationwide abuses
    
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    Courts considered three elements to review punitive damage award:
    
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      Reprehensibility of D’s misconduct – most important
      
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      Difference between punitive award and P’s actual harm
      
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      Comparison to fines in similar cases
      
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    Standards taken from BMW v. Gore, the first case to reduce a punitive damage award
    

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  Court says that a ratio between compensatory and punitive damages exceeding single digits is unlikely to comport with due process
  
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    However, Posner justifies a punitive damage award 37x higher than the compensatory award in Mathias v. Accor Economy Lodging
    
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      Here, compensatory damage was low compared to reprehensibility of harm
      

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  Suggestions for punitive damages reform:
  
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    Make a distinction between first time and repeat offenders
    
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    Give juries better instructions to get more consistent results
    
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    Have a punitive damages only class action
    
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    Build into excessiveness review past damages that have already been paid
    
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    Allocate some of reward to societal benefit to avoid P windfall
    
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      In Dardinger v. Anthem Blue Cross, court arbitrarily picks a charity to give it to
      
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      Could set up a fund for others who were harmed or give it to the state
      
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      Sharkey recommends societal damages approach through fund which others harmed by the D’s actions could collect from